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Why Merck (MRK) Outpaced the Stock Market Today

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In the latest trading session, Merck (MRK - Free Report) closed at $107.98, marking a +0.33% move from the previous day. This change outpaced the S&P 500's 0.14% gain on the day. Elsewhere, the Dow gained 0.3%, while the tech-heavy Nasdaq added 0.16%.

Shares of the pharmaceutical company have appreciated by 7.44% over the course of the past month, outperforming the Medical sector's gain of 4.24% and the S&P 500's gain of 4.89%.

Analysts and investors alike will be keeping a close eye on the performance of Merck in its upcoming earnings disclosure. The company is predicted to post an EPS of -$0.10, indicating a 106.17% decline compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $14.61 billion, indicating a 5.65% upward movement from the same quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.55 per share and a revenue of $60 billion, signifying shifts of -79.28% and +1.22%, respectively, from the last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Merck. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Merck is currently sporting a Zacks Rank of #3 (Hold).

With respect to valuation, Merck is currently being traded at a Forward P/E ratio of 69.47. This signifies a premium in comparison to the average Forward P/E of 15.63 for its industry.

Investors should also note that MRK has a PEG ratio of 8.05 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. MRK's industry had an average PEG ratio of 2.65 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 54, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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